Olympus former president arrested

PanARMENIAN.Net - The former president of under-fire Olympus has been arrested in Tokyo, prosecutors said Thursday, Feb 16, in one of the biggest ever financial scandals to rock corporate Japan.

AFP reports that Tsuyoshi Kikukawa - who has been named as a key player in a scheme to shift $1.7 billion of losses from the camera-maker's balance sheet - was arrested on suspicion of violating laws banning falsification of financial statements.

The Tokyo District Public Prosecutors Office also said in a statement that it had arrested former vice president Hisashi Mori, 54, former auditor Hideo Yamada, 67, as well as former brokerage house executive Akio Nakagawa, 61.

Three other officials of an investment fund were arrested by the Metropolitan Police Department, the prosecutor's office said.

All seven conspired to falsify Olympus's balance sheet, reporting that its consolidated net assets stood at 344.871 billion yen ($4.4 billion) in fiscal 2006 instead of 233.737 billion yen, the prosecutors' statement said.

They also made a false statement in fiscal 2007, reporting net assets of 367.876 billion yen, window-dressing the real value of 254.246 billion yen, the statement said.

Prosecutors will press ahead with their probe and continue to raid locations related to the case, including Kikukawa's house, public broadcaster NHK reported.

The three Olympus executives have admitted to prosecutors their involvement in the falsification of financial statements, TV Asahi said.

Olympus's admission that a small group of top executives used overpriced deals to cover up bad investments dating back to the 1990s has shaken confidence in Japanese corporate governance.

The firm eventually admitted in early November that it had hidden the losses after the allegations were first aired by Michael Woodford when he was ousted as chief executive and president the month before.

Following his sacking, Woodford launched aggressive international media offensives against his former bosses, questioning the firm's past acquisition deals and the outsized consultant fees it had paid.

But the Briton, the firm's first non-Japanese president, did not win the backing of Japanese institutional investors and gave up a push to get his job back.